(Adds Yeltsin meeting Kiriyenko paras 6-8)
NAZRAN, Russia, Aug 1 (Reuters) - Russian Prime Minister Sergei Kiriyenko
offered on Saturday to make good on promises of economic aid to devastated rebel
Chechnya, prompting the region's leader to say after a meeting that he had "new
hope".
"We need stability and peace in Chechnya and the whole North Caucasus...We
need to settle Chechnya's economic problems," Kiriyenko told a joint news
conference after two hours of talks in Nazran, capital of Ingushetia, a region
adjoining Chechnya.
"We must also provide work for the citizens of Chechen, considering there
was a war and the whole economy was ruined," he said, saying poverty was the
driving force behind the violent anarchy gripping much of Chechnya and affecting
its neighbours.
Chechnya President Aslan Maskhadov -- a former Soviet artillery colonel who
led the guerrilla army that forced out Russian troops in 1996 after 21 months of
carnage -- has complained bitterly that Chechnya has seen little of the money
promised under a peace treaty he signed in the Kremlin a year ago with President
Boris Yeltsin.
"After today's meeting we have new hope that the agreements will, if only in
part, be put into practice," Maskhadov said.
Yeltsin met Kiriyenko immediately after his return from Nazran at his
Gorky-9 country residence to discuss the results of the talks, the Kremlin press
service said.
"The head of the government informed the president that the questions of
securing peace, stability and order (in Chechnya) had been discussed at the
meeting," it said in a statement.
"The president noted that an economic growth and a rise in the people's
living standards is necessary to reach calm in the Caucasus. The president also
underlined the need to secure law and order and to fight crime and terrorism."
Despite the cordial talks in Nazran, the heavy security, including
helicopter gunships, served to reinforce the sense of unease around Chechnya.
The most notable of dozens of kidnap hostages, some of them foreign, is
Yeltsin's personal envoy, who was seized on May 1.
Seen as a moderate in Moscow despite his refusal to waver on claims to
sovereignty, Maskhadov's perceived failure to win concrete compensation from the
Russian government has helped undermine his authority in the million-strong
Moslem region.
Kiriyenko, 36, only took office four months ago and so is largely free of
involvement in the eyes of the Chechens with the assault on them launched by
Yeltsin in December 1994. He already admitted this week the government had not
kept its promises.
"Kiriyenko was not among those who started the war. He gathered signatures
to stop the war," Maskhadov said of him.
Freely elected in January 1997, Maskhadov has struggled to rein in kidnap
gangs and, recently, Islamic fundamentalists. He survived an assassination
attempt 10 days ago, winning a vote of confidence from Yeltsin and his offer of
talks with Kiriyenko.
"There is a lawfully elected president and executive in Chechnya who have
the support of the people and we will give those authorities all the help we
can," Kiriyenko said, making clear that, for all Maskhadov's reluctance to toe
Moscow's line, his rule is still preferable to anarchy or to Moslem hardliners.
Underlining that Russia still regards Chechnya as an integral part of the
federation, Kiriyenko pledged to do more to see that pensions and other state
benefits reached the region and offered to grant it the status of "free economic
zone", rather like the tax-free enclave of Kaliningrad on the Baltic.
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